Dave Says: Let’s Look at Insurance

Finance, Home & Family, People
on March 25, 2010

Dave Ramsey is a money management expert, national radio personality and best-selling author. His nationally syndicated radio program, The Dave Ramsey Show, is heard by 4.5 million listeners each week on more than 450 radio stations throughout the United States.

For more financial help or to submit questions for Dave Ramsey, visit americanprofile.com/daveramsey.

Dear Dave,
Im in a long-term relationship, and Im thinking about getting some life insurance. Would a Term 80 policy be a good idea?
Brett in Chicago

Dave Says: Life insurance is a smart thing, but I think you could make a much better decision in the kind of policy you buy. Term 80 means the policy will provide coverage until youre 80 years old. That also means itll get pretty expensive, as far as term insurance goes. It may have a savings component built into it as well, which would mean its really not term insurance. Pure term insurance doesnt include any kind of savings plan. I always recommend 15- to 20-year level term insurance. Its the best buy out there: The price stays about the same, and the amount of coverage is locked in for the life of the policy. Plus, if you follow my plan, 20-year level term insurance will take you through the process of getting out of debt and building wealth. Then, you wont need an insurance policy anymore, because youll be self-insured!

Dear Dave,
Were thinking about dropping our expensive health insurance plan and moving to a less expensive, Christian-based, medical sharing program like Medi-Share. Are you familiar with these programs, and do you have an opinion on them?
Lenny via Facebook

Dave Says: There are a number of these types of programs that have great reputations for doing what they say theyll do. If youre serious about this, Id recommend looking for one that has a solid track record for several decades. You also need to make sure you fully understand the coverage issueswhat you get and what you dont getand realize that, technically, you have no guarantee. Remember, this is not traditional insurance. That means the company is not backed up by an insurance commissions risk pools, and its not regulated by the insurance industry. You mentioned Medi-Share, and it has a great reputation. Just realize that youd be way off the grid in terms of the usual way of doing things!